Bailey: UK economy and financial system have so far been resilient

The Bank of England said in its semi-annual financial report that the British economy has so far proven to be able to withstand higher interest rates, but that it will take some time for the full impact of higher borrowing costs.

Bank of England Governor Andrew Bailey stressed that "the UK economy and financial system has so far been resilient in the face of interest rate risks, we will continue to monitor credit conditions for any signs of tightening that cannot be satisfactorily explained by changes in the macroeconomic outlook."

Bailey explained, "The flexibility of the banking system is not a constraint on banks managing their net interest margins and thus managing the rates they pay to savers and the rates they charge on mortgages. It is also important that we have competition in the banking system, which encourages banks to compete and compete on savings rates."